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>> the worst week in you want to point fingers? point them at washington. good evening, everyone, this is "the kudlow report." >> the president urged both sides of the aisle to get america's fiscal house before we fall off the cliff 52 days from now. what if they're arguing about the difference between tax loopholes and marginal tax rates. that's the debate. >> you mark my words. there's no way that the entire tax hike would be allowed to take place. no way. in terms of investment strategy, it is ridiculous that we'll be facing this. why all of the bickering when it equates to just one quarter of 1% of gdp. all right, supply side art mentor will join us to discuss. also tonight, a shocker, david petraeus quits in disgrace or was he forced out just days before he was to testify in front of congress over the benghazi embassy terror attack.
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will we ever get the real answers? was the threat of blackmail behind this? >> we begin this evening with the president pushing congress to come together right now and solve the fiscal cliff mess. let's give peace a chance. >> cnbc's chief washington correspondent john harwood joins us now with the details. good evening, john. >> reporter: good evening, larry. the white house threat toned veto any legislation extending those top-level bush tax rates. we've got to look closer at two the two principal negotiator his to say today because there were signs of conciliation and first there was john boehner drawing the line not against tax increases, but increases in tax rates. >> listen, the problem with raising tax rates on the wealthiest americans is that more than half of them are small business owners. we know from ernst & young 700,000 jobs would be destroyed. we also know that it would slow down our economy.
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>> president obama from his part came into the east room. he also drew a line, but the line he drew was not insisting on higher tax rates but on higher tax revenues. i'm not wedded to every detail of my plan. i'm open to compromise. i'm open to new ideas. i'm committed to solving our fiscal challenges, but i refuse to accept any approach that isn't balanced. >> so, larry, balance is the key for president obama, not necessarily increases in tax rates. signs of conciliation on both sides and late this afternoon the bipartisan policy center which has been pushing for a simpson bowles-type solution said they were encouraged by the flexibility shown on both side says. john harwood, appreciate it and let's get reaction, and we have republican whip senator john kyl from arizona and senator kyl as
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always, sir, thank you for coming on and let me just ask you, is this a new era of good feelings and is this an era of compromise and is this an era of common ground, mr. kyl? >> kumbaya. well, we hope so and you focused on precisely the issue here and maybe from what the speaker said and what the president said we've got the key. it's not tax rates. as speaker boehner said, raising tax rates on these small business owners would be a job killer. two years ago the president avoided that by saying it would be a blow to the economy, but that's different than raising tax revenues which both the president said he wanted to do and speaker boehner said he was open to and tax revenues could be generated by two ways other than raising tax rates and one is to eliminate some of the deductions, credits, exemptions and special provisions in the code that end up producing more revenue, but without affecting the rates and other is through
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economic growth which you know because you've been a huge advocate of pro-growth economic policies and tax policy. it raised more revenue for the government, but without doing any damage to the tax rates. >> right. >> that could, if he tried to raise them it would produce less revenue. what interested me today regarding president. all during the campaign, as you know, senator, he argued for raising the top tax rates and he added sort of taxed the rich, and he didn't mention the top tax rates and that's what i was listening for and that suggests to me, at least, there's some flexibility. how do you see that? what did your ears tell you with regrd to what he said today? >> well, that's the key, and if we can focus, not on tax rates, but to give the president something that he wants, more tax revenues, as i said, there are ways to get more tax revenues either through
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eliminating some of the deductions and critics and so on, and/or, by producing more wealth as a country, thus resulting in more taxes paid to the government, can i make another point, though? simpson-bowles is not a good template here because it sets up a contest between lowering marginal tax rates and raising the business taxes that is to say dividends, capital gains and the estate tax. simpson-bowles, in effect says you can have lower rates on one side or the other, but not both. that's not good. the people who small businessmen who paid pay their individual taxes and pay their business taxes as individuals would take a hit if either their marginal tax rates rise or these business tax provisions like capital gains, for example, are increased. >> right. you can keep them both where they are and still eliminate deductions and credits and produce more revenue through that and through pro-growth
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policies. >> what interests me also in this whole discussion is how the republican caucus in the senate and the house is dealing with mr. boehner. there's a concession here, senator kyl, is it not? the fact that john boehner went out there and said, look, we can cap loopholes and deductions and we will provide revenues and they'll come from upper end taxpayers and they're the ones who itemize without raising the rates or without lowering the rates. >> in other words, that's a concession and do you think the republican party can live with that concession and vote for that concession? >> it is a concession and yes, i think so. remember, this is almost the same thing, in fact, in much more detail, senator pat toomey as part of the so-called super committee presented exactly this concept and we raised something like $300 billion in additional revenue by capping some of these deductions and credits and the like. we didn't hit the business tax side of it. our democratic friend still
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wouldn't accept it because it didn't produce enough ref now in their opinion and since we're just talking about averting the fiscal cliff here and about extending the tax policy of the last decade, i think that this offers a potential way to achieve both goals, leave the tax code where it is, but raise some additional revenue through the tax code, but not tax limits. >> i haven't heard anyone talk about spending cuts here. nobody likes the across the board cut because they feel it's cutting defense too much. okay. i guess i get that. i'm no expert. will there be any spending cuts as part of that deal and might that be the clinker in the whole deal. nobody's talking spending cuts. >> i think in the context of the fiscal cliff the answer is probably no, but in the context of sequestration which is the other half of this fiscal cliff. the answer has to be yes, and we have to save about $109 billion this year. some of that could be with additional revenue and my thought is if you're going to
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give the additional revenue on the fiscal cliff side then you try to achieve the savings of $109 billion and by the way, that's not that hard to do and that would avoid the sequestration, and those are the components of the deal here that could be struck. >> so you think -- you think -- let me just understand this, because this is the first time i've heard this. you think they'll throw out the automatic budget cuts and insert a new set of budget cuts that have bipartisan support? that sounds like a very difficult thing to me. >> it's not that hard and, yes, i do and here's why. the super committee didn't come up with the $1.2 trillion in cuts over ten years. as a result, we have to cut $109 billion out of the budget each year for ten years. well, it's not that hard to get $100 billion for one year and if you wanted to, for example, say i'll tell you what, let's cut this in half and for six months we'll get $50 billion worth of cuts and then we'll figure out
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what we'll do the next six months and there are ways to do this in a way that won't result in cuts for the budget and i think that will be done on one side. the tax provisions on the other side. >> right. put the two together and you avoid going over the fiscal cliff. >> very bullish, senator kyl. very, very bullish. thank you, sir. appreciate it, as always. the congressional budget office says that marginal tax rate hikes will not hurt economic growth, but a lot of people disagree, including me. >> let's bring in our distinguished guest. chadburnestein and former vice president biden chief economist and art lafer, former reagan economic adviser. raise tax rates on the wealthy won't damage the economy. do you agree with that? >> i don't at all, larry. i think it is silly. it will not only hurt the economy, they won't get the revenues they want and it's just a silly way to go. you can't love jobs and hate job
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creators, frankly, and by the way, jared, congratulations. >> thank you, art. that's nice of you. well, look, i've enjoyed all of the conciliatory talk i've heard so far. in fact, we've done this on other nights, as well. i do feel there's compromise in the air and art, it's always good to hear you in that spirit. i will say this. the president won the election and 2 percentage points on the popular vote and landslide on the electoral college and running explicitly on the platform and the expiration with the upper income were tax cuts and the people were behind him and 60% in the exit polls said they supported that plan and now we have the evidence from the congressional budget office behind them and in my view, the president and the people and the cbo are all lined up on the right side. i'm not saying that will convince you. ? jared, my friend, can i just make one factual correction? >> there are two tax questions in the exit polling and when you
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ask people about the income tax assuming there's a hike and then yes, you're correction, by 47 to 35 and not a huge amount, and they do favor tacking the wealthy and there was another question in the exit poll and i wrote a column about that, and should taxes be raised to help cut the budget deficit? guess what? yes, 33. no, 63. so i go slow on the mandate side. the country is very divided about tax hikes. >> go ahead. i'm sorry. >> jared, the republicans were elected to control the house. they also got a mandate. they could have been thrown out. four years ago the democrats controlled the house and now the republicans do and they were reelected to control the house so you can't just use the president by himself. >> i think that's a fair point and the cbo is not evidence. the cbo is an interpretation and an incorrect interpretation at
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that. >> that last part i lost you on. >> we all have the evidence. >> larry, it's my understanding that you're absolutely right, 48% in terms of taxes and 60% said they were in favor of tax increases and we can check that out. >> no. it went the other way and i just reviewed it again. >> the key point is -- right, the cbo says it doesn't matter. why do you think -- if you raised the tax rates, we're just talking about the top race and we're not talking about eliminating all of the bush taxes. >> right. >> if you raise those top rates and on income, on capital gains and dividends and on estate inheritance, you agree with the cbo that it won't affect economic growth? >> two reasons for that. one is that -- >> do you? >> yes, i do agree with that, and the reason is you're asking sort of the actual microeconomic
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guts here. the reason is twofold. one, there's really almost no labor supply elasticity up there. you and art way overdo that point. people at that income level they just don't respond in terms of their labor supply to those kinds of wiggles in the tax rate. these folks are not income constrained and if you cut their taxes they're not going to cut more. they're going to save more. it's not going change their consumption either. >> they'll move the jobs elsewhere. >> that didn't happen in the clinton years. >> they hire all of the other people, too. >> these are people that caused the tax to fall on other people and that's what they'll do and it's not just their own elasticity and it's the second, third and fourth effects. >> that's the supply side theory is you're the father and i understand you're defending your beloved child and i get that. the evidence simply doesn't support you and one of the things that i said to larry on election night is a big loser in this election was with apologies
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to you, art, a big loser was supply side economics because that's what mitt romney ran on and it was soundly rejected and the tax structure was beneficial to the economy and the budget. >> let me ask you one question, do you think the president would go along without raising the tax rates on the four categories that larry mentioned? do you think he would agree to something that would not raise those rates? >> i think he's going to start where he should start which is what he ran on which is the expiration of the upper income cuts. where he ends up i'm not sure and that's the deal here. >> the other point that i want to raise here is you're not only talking about raising the capital gains tax rate and raising the dividend tax rate so the cost of investment goes up after the tax goes up and income taxes go up and you also have coming to obama care where you will have a surtax rate on higher incomes and capital agains all over again and
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dividends and when you get through with all of that, the dividend tax and the income tax be about 44%, 45%. and i don't think the dividend tax will go up that high. >> what do you think the economic impact would be? the cbo has this silly quarter of a percentage point change. do you think there will be a bigger, negative economic impact? that's what i'm really trying to get to. >> i think it will be a huge economic impact. i think we're going over a taxmageddon cliff and that will be very bad next year. i think obama would have wished he would have extended all those tax cuts going forward because when this goes into 2013, it's going to be a real problem. >> jared, i'll give you the last word on paul drugman. drugman writing today in "the new york times," i know he's a favorite of yours. he says do not extend any of the tax cuts if you can't extend the top rates and he said that won't matter either, do you agree? >> so paul's coming exclusively from a place of leverage there.
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the president -- he's saying the president should go over the cliff and have the leverage to get the sunset of the upper income cuts and everyone wants to extend for the middle class. >> art lafer, appreciate it. coming up on kudlow, the dow and s&p suffer their worst week in more than five months. big name stocks falling into bear market territory. later on, there's something rotten in denmark. just days before having to testify before congress about benghazi, cia director general david petraeus suddenly resigns citing an extra marital affair as the reason. my goodness. we have to cover that, too. don't forget, folks. free market capitalism is the best path to prosperity. i say lower the tax rates and get rid of the tax deductioning a ands and we'll grow this economy at 5% or 6%. we'll be right back.
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>> dismal week from washington to wall street. pickal cliff fears sending stocks into a tailspin and maybe earnings fears also and for the week markets drop almost 2% across the board and we have phil orlando, chief equity strategist and welcome back,
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phil. >> i want to have a thought experiment with you. i want to say with you that there's not going to be any falling off the fiscal cliff that not only will we not have a $500 billion tax hike in the next two mojs, we won't have increases in marginal tax breaks and i know you may disagree, but if that were the case, how would that affect your outlook for stocks. that's what i'd like to know. we'd go higher in that case, the last two days since the election, the stocks are down 4% or so. it was the fifth worst reaction to an election in the last 112 years and the reason for that is investors are looking for the debt ceiling issues and saying it may be no better than a coin flip if we go into a recession, under your preppis, if that's off the table and if we're just looking at economic growth and
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multiple expansion then stocks are going higher if we don't have to worry about a potential recession. >> let's stay with that. i don't know that that's going to be the case forever. my suspicion is here in the lame duck a deal is developing where john boehner's revenue increase from deductions is going to be the gift to president obama for tacking rich people, at least not yet, with that in mind, phil, what about the second cliff and that's the earnings cliff. a lot of people disappointed in earnings and a lot of the stocks in the s&p, for example, are in bear mark territory. what's your take on that? third quarter earnings are not bad and if you look at the productivity and the labor cost data that we saw the other day, margins in the third quarter were pretty good and i think one of the problems here is because of the concern about the election and the fiscal cliff and the debt ceiling is that a lot of businesses have developed a self-imposed chilling effect.
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they've stopped spending and they've stopped investing because they don't know in terms of the visibility and the uncertainty. again, if you could wave your magic wand, larry, and make all of this go away and then you'll have companies that will spend and hire and build the marginal plant and the economy will get back to something at or near a trend line growth. >> where are we now? >>. >> you're trading just under 14 times this year, and 12.5 times next year, larry. >> 12 1/2 times next year, is dare i say it, relatively cheap. >> oh, agreed. >> our base case is that we should be trading at no less than 18 times forward earnings and if we look out into the cycle we think we can get back to something in the upper teens over the next couple of years. so the reason stocks are as cheap as they are now in my opinion is based upon a lot of the uncertainty associated with the election and the fiscal
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cliff. i can't promise forever. that's just my hunch. we are, in the weeks ahead going to get some very bad economic statistics from hurricane sandy. very bad. it might even look like a recession. will the stock market be able to see through it or will they get more fearful that the earnings cliff is going to turn into a recession cliff. >> we had our macro policy hearing and what we discussed was the impact on sandet and impact on the scomplekz we've taken the gdp numbers for the first quarter down below 1%, largely impacting the definite economic impact that we'll see from sandy and the potential economic impact from the election, but as we roll into the spring of next year, say the second, third quarter, at that point the drag from economic growth from sandy becomes a positive impact. >> phil orlando, where are your
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favorite investment sectors? where are your best ideas right now? >> right now, we've sort of pulled in our horns and neutralized the portfolio in terms of equities and fixed income. we are watching very carefully the rhetoric. i was encouraged by speaker boehner and the president today, but right now we just need some more information. we need to know whether or not we're going to get a deal. if we do get a deal and the recession's off the table then we'll be back to overweight stocks with areas that are economically sensitive like tech, like consumer discretionary and financials. >> one thought experiment and things could be very bullish. >> phil orlando, as always, thank you very much for coming back on. >> our next story is a real doozy. cia chief general david pet ray awes resigns amid a sex scandal. will we ever get the answers to ben gassy and will will we ever get the answers to his resignation? the full story is grisly, up next. tdd#: 1-800-345-2550 let's talk about low-cost investing.
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well, if itmr. margin?margin. don't be modest, bob. you found a better way to pack a bowling ball. that was ups. and who called ups? you did, bob. i just asked a question. it takes a long time to pack a bowling ball. the last guy pitched more ball packers. but you... you consulted ups. you found a better way. that's logistics. that's margin. find out what else ups knows. i'll do that. you're on a roll. that's funny. i wasn't being funny, bob. i know.
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. >> with both the house and senate set to hold classified hearing on the dead le terrorist attack in benghazi. today we learned of the abrupt resignation of cia director david petraeus citing an extra marital affair. also today the pentagon released a new timeline of the response to the attack showing it took more than 14 hours for first
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u.s. military unit to arrive in libya after the attack. all right. >> joining me now is syndicated radio talk show host john bachelor. john, welcome back. david petraeus is a great american, an admired american. now he has to resign from the cia, why, john? what is the meaning of this? what is the timing of this? >> i am told by several sources it was not beauty killed the beast, larry. it was benghazi. mr. petraeus misled, i'm told. misled an important committee on the hill and he did not want to return to that committee as director of the central intelligence. >> so you're saying that the extra marital affair is not the reason? it's the reason he's cited, but you're saying? fact, that's not the case? there's a whole history of these things in spy circles and secret services and blackmail and you're saying that ain't what happened? >> i'm surprised at the timing
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and the timing tells us a deal. i am told, larry, this is my best information that mr. be petraeus has been under pressure of the white house to maintain the narrative which continues to deteriorate about benghazi especially that line about the hateful i haved why. mr. petraeus knew that there was something that could be played against him if he did not go along. i am told, and therefore a friday afternoon he walks out and cites an affair if everyone in washington shrugs at and that tells me, larry that petraeus has gotten out of the line of fire and his assistant, mike morel will now have to maintain the white house's narrative or comply with the committee's demands to get the facts. >> you're saying that petraeus did not want to stay with the white house narrative throughout the video. >> that's what i'm told. yes. >> and i guess my question is the white house forcing petraeus out on the eve of his testimony
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to the intelligence committee. are they forcing him out or is he just leaving because he doesn't want to fight with them? >> you're a good writer, larry, you've written two wonderful scenarios and i was going to write the one where they forced him to walk the plank. perhaps the fiction that he maintained in september no longer could stand up a detail. i am told that in his first testimony to these important hill committees he was not under oath. not under oath. we can believe that this time there would be skrut no that would be extremely threatening if mr. petraeus did not follow the facts as he knows them. >> petraeus is, in many respect, an american hero serving in his work in iraq and aflg of aing, too. an american hero. the fbi is investigating and i don't know precisely what and i only know what i'm reading about this in "the new york times" and
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elsewhere, but the fbi is getting involved. is that something to do with the timing also because that sort of thing will leak out over throughout official washington? >> benghazi is not about libya. benghazi is about the policy of the obama administration to involve the united states without clarity to the american people. not only in libya, but throughout the whole of the arab world now in turmoil, benghazi is about the nse directing an operation that is perhaps shadowy, perhaps has a presidential finding and perhaps doesn't and takes arms and men and puts them into syria and this is a very large story and it's right in front of us for the second term. >> boy, this thing will unravel like crazy. thank you ever so much. we appreciate it. >> coming up on youed kudlow, the politics of reaching common sense and common ground on the fiscal cliff.
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did the gop go wobbly? i say stick to your economic principles. that's next on kudlow. [ female announcer ] e-trade technology can help make you a better investor. our e-trade 360 investing dashboard shows you where your money is, live. e-trade pro is so usable you'll actually use it. and our apps are the ultimate in mobile investing. become a better investor at e-trade.
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welcome back to "the kudlow report." today we heard from house speaker john boehner. take a listen. >> the purpose of fofrjing a bipartisan agreement that continues to solve the problem, we're willing to accept new revenue under the right conditions.
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>> just an hour later this is what president obama had to say. >> i'm not wedded to every detail of my plan. i'm open to compromise. i'm open to new ideas. >> all right. do i hear the foundation for some fiscal cliff common ground? we're going to explore the politics of this. here now is matt miller, and steve malinga and tony fratto who is a former bush 42 white house press secretary. mr. press secretary, i want to go to you first. you look at this, it's sort of hard to understand, and it's a good victory for president obama and the democrats picked up seats in the house -- in the senate and the republicans are now in the house, but there seems to be this common ground compromise coming. politically, why do you suppose that is? >> well, look, because we have divided government, we are going have to have some agreement on a way forward, but i don't think
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it's an agreement where republicans need to abandon their principles here, larry. my view on mandates is if you have to argue that you have one, you don't. they're pretty obvious. when johnson had a mandate and reagan had a mandate. we thought we had a mandate after 2004 and we were proven wrong. i can tell you from experience, democrats who by the way, were in the minority at the time didn't say yea, you won reelection and you should do what you want to do so social security reform and immigration reform. we were fought on those things and i think we'll come to a good, negotiated agreement and republicans should stick to their guns and principles because they earned that right. >> matt miller, maybe one of the messages that the white house got because correct me if i'm wrong, axelrod and one of the top strategists said they didn't really think they had a mandate and would agree with what tony said. maybe they see that what the country wants is governance. maybe they see we have to make some decisions here and maybe he
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wants a legacy along those lines. is that possible? >> i think it's possible because it is so weird because all of a sudden since tuesday after this year and a half of all of this intense campaigning, we're exactly back where we were during the big debt limit hubbubs and negotiations and it's back to the regularly scheduled programming and the republicans have the house. obama won impressive, but still narrow victory, and, you know, and we're in the same boat. the thing that's worth focusing on is this whole cliff, quote, unquote, crisis is a totally artificial man made thing and this is not a real economic problem where your honor has serious currency issues and serious debt issues. this was totally created in the last kick the can down the road until now mode and we're picking up exactly where they left off and obama has the leverage
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because the tax cuts are set to expire. >> let me give you a whack at this. we have a democratic president and it will be a more liberal institution and you do have the conservative republican house, and i am surprised at how much comedy there is, kull mitty in the last couple of days. i mean, if the democrats wanted to blast out and start talking about raising top tax rates and the liberal agenda items, i don't know that i'd blame them given the election. why is it going the other way? >> i don't know. let me be cynical here, it's easy to talk compromise until you get into the details. i want to hear more about boehner's idea that we're going to be able to raise revenues without raising tax rates and what he means by that and, you know, the democrats have been really against things like ending some ever these what we call loopholes and whatever,
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certainly for the middle class and we have to means test those things now? and let me remind you of something, the last tax reform we had where we eliminated these, it took two years to negotiate that. >> just to follow up on that, chuck schumer, senator chuck schumer who some people think run the senate and that may be unfair to harry reid, but schumer is an unspoken guy in the leadership, but he wants to raise tax rates and i can't believe that he's going to go along with obama who, of course, campaigned on raising tax rates and would like to go much further than this fiscal cliff business. >> in particular, he has done things like sort of denigrate the idea that we call loopholes. he says they're social policy and means of achieving certain things so i can't imagine that he's going to stand up and basically say to the republicans in the house, yea, we'll go along with that and i assume that a lot of what they'll do is eliminate some of the tax
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expendz itexpen expenditures which means taxing the tax expenditure side. >> how long will this common ground compromise atmosphere last? how long before the liberal wing of the democratic party which believes they had a large victory on tuesday want their whatever, ounce of flesh, pound of flesh, social policy, energy policy and economic policy! how long before they come crashing in. >> i think they're there already and they are keeping a watchful eye on their president right now to make sure that he doesn't abandon them on those issues too quickly, but i think we'll have to come down to finding that common ground and i think it will be in the cold of december before we really get there because a realization will have to upon happen and john boehner tre
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tried to make that clear this week and if we'll have a fight strictly on tax rates, the republican house will not vote for higher tax rates. that's not going happen and i'm going to think today of the 230-plus house republicans which ones might be vulnerable for opposing higher tax rates and i can't think of any. i mean, they are unified here and they're representing their dift recs and they've won one, if not two leches on their policy and they're not going anywhere so that has to come off the table and we have to start talking about some of these new ideas as difficult as they are, steve is right. these tax expenditures are difficult to deal with. >> matt miller, wait, we're just getting started. what about things like entitlement reform? what about things like spending cuts? what about things like cap and trade? what about value added taxes and spending? >> i want to go back to this point. the democrats are the liberal party and the republicans are
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the conservative party. i think the democrats will want their pound of flesh. >> those things are long term and none of that will happen in the next few months and one thing is clear. obama can let the tax cuts expire. my guess is he'll start talking immediately, maybe next week about proposing, you know, sustaining the tax cuts for everybody except the top 2% and he can let the tax cuts expire and do the same thing and then republicans will try to essentially block a tax cut for '98% and 99% of the american people and the only choice is how he chooses to approach the debt limit and obama would be a fool if he lets them use it the same way. my bet is if the white house faces the clinton option and the debt limit's unconstitutional and we're lifting it, if you don't like it, see you in court. >> how long, do you think, we're in early november. how long do you think this era of compromise and common ground
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will last? >> i think that any deal isn't going to happen until the last hours of december. so, and it's going to be a short term deal and i would bet that they are looking for a way to kick the can down the road again rather than taking up the big issues in the short period of time. >> in that sense, nothing's changed. matt miller, steve malanga and tony fratto. let's switch gears. classified information breached by navy s.e.a.l.s. seven members of the famed navy s.e.a.l. team six punished for releasing classified information to video gamemaker electronic arts. it's a bad story, up next. melons!!! oh yeah!!
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>> seven members of the elite navy s.e.a.l. team six that killed osama bin laden will be disciplined for spilling secrets to develop a video game. according to u.s. military officials ea games paid the navy s.e.a.l.s to disclose classified materials and use unauthorized equipment for their newly released game "medal of honor,
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warfighter" and brent thor, brad, by the way, i love the book. >> this is a nasty story because the s.e.a.l.s are among the best and the brightest. why is this think? >> let's be clear. ea did not pay them to turn over equipment and top secret stuff. they paid them to consult on a very hot video gaming series and it's not against the rules for the s.e.a.l.s to do this, but they have to have the command and that's the problem and why they're in trouble as well as they did disclose apparently some tactics and procedures they shouldn't have, and also they shared some high-tech gadgets that only s.e.a.l. team six has access to. >> but the army and pentagon has remanded them and basically ending their career and they must think it's a pretty serious violation. >> these guys are frozen and they got a letter of reprimand in their jacket and they're not going get promoted ever again. listen, larry, if larry kudlow is a s.e.a.l. all you want to have said inside that community
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is larry kudlow, good guy. not larry kudlow, that guy who did x, y and z. your reputation is everything in the s.e.a.l. community and these guys have harmed themselves. they knew the rules and yet they still went out and made this deal with ea without asking their command. >> that's the tough part because we all admire them and their service. >> they're great guys. great guys. >> let me switch gears because this incredibly fast-breaking story on general david petraeus resigning as head of the cia and some speculation that maybe the marital infidelity had something to do with it, but maybe it goes deeper than that, maybe he's at war over the benghazi story with the white house. do you have a thought on this? >> from the beginning i had heard rumors back when petraeus was in afghanistan that the obama administration was looking to cut him off at the knees because they thought he could be a potential foe politically. so it was brilliant to bring him out and do what he did with them, but he got put at langley
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to die. he was put in the cia to end. this guy can't keep an affair secret. i'm not saying he didn't have an affair and this is all -- where there's smoke there's fire and the timing of this just stinks to high heaven. >> just before the hearing starts, you know, go back, the cia issued an official statement several weeks ago and they refused to buy into the white house argument. the cia said very clearly, at no time did they, the agency ever deny assistance request from the people of benghazi which leaves the state department open or the nasa security. petraeus, it seemed like at that time was throwing them under the bus. >> listen, and the state department thought the cia was supposed to do a certain amount of backup for them securitywise there and it's 9/11 and why was ambassador stephens even in benghazi which is so dangerous on nech. what was he doing there? who was he meet with and why did this happen? i've heard incredible stories
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about this and the american people need answers because what we're getting is absolute b.s. out of this administration. >> brad thorpe. appreciate it very much. now let's talk about good news for the economy. it's on the uptrend and upon anied to pick up speed in the coming months and that according to the nation's largest real estate trade group. a foundation of a better economy would be welcome news. that's next up. from local communities to local businesses. the potential of yelp unlocked. nyse euronext. unlocking the world's potential. to a currency market for everyone. the potential of fxcm unlocked. nyse euronext. unlocking the world's potential.
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>> all right. the housing market looks like
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it's on the road to recovery, but then again, credit is still tight and i want to ask at the end of the election season will open the credit spigot a little bit. let's turn to our real estate experts for their insight. the new york luxury super broker, don peebles and chairman and ceo of the people's corporation. i'm not going to ask you since the last three days since the election, just generally, what are you hearing? bids? offers? >> bids, offers, contracts signed within 48 hours and never happened and 20 million-plus dollars and the election is over and they have some certainty. >> is credit opening up? >> i know these are big hitters. >> no. >> is that going to slow things down? >> it will continue to keep it slow. >> it's just the high end you're describing. cash, rich people buying property. >> don, ask you typically on the commercial real estate side what are you seeing? >> certainly on the development side, capital's coming back to
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development mainly in the equity side and now debt's coming back, but on a lower leverage basis, but in a market like miami which was dead in the water, miami has a supply of luxury condos because the global markets, all-cash buyers have come in and domestic all-cash buyers have come in and now there are 82 new developments planned or under construction for condos in south florida. >> even with all that overhang and in 2007 there were 35,000 unsold developer units in the downtown area alone. >> so markets can work. >> that's the great thing. >> the free market worked very well. >> let me ask you one more thing. tell me about pricing. i want both of you to tell me about pricing because some of the numbers are interesting and prices are up and in some of these report, 8%, 12% from a
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year ago, but still, a continue% move is a 10% move. are you seeing that in south florida? >> in south florida, condos went up 28% from a year ago and we're seeing that in washington, d.c., and the markets are strong and it's another market we're operating in and what we're having difficulty with is las vegas and the major market for the company and las vegas is having a lot of difficulty. >> you're national and international, what's the hottest place right now? >> i think new york, as always, miami, very hot. >> i agree with don. miami is so hot and buildings like the one he built is amazing. >> are these people coming up from south america. >> not chinese yet, from miami, okay? it's still south america all around south america. >>. >> brazil, and europeans and not the chinese yet although that's next from mime. >> choin ease and new york, really in new york. >> heavy. >> four of the five deals i've done in the week are chinese. >> and they're from mainland
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china? >> yes. >> and they want to come here, what? are these large places? are they going to open businesses here? they're safety deposit boxes and places they can enjoy and places to have money that's not in their homeland. >> so if i want to buy a condominium in miami can i get credit for it, can i get a mortgage? >> but not with a lot of leverage. 60%, and there are larger banks that are getting back into the market there. one of the things i want to point out also is in new york, because we do business in new york as well, is latin american buyers who traditionally looked at miami as the place to put capital or brazilians, they're now coming to new york and then mimy is getting more russian, more european buyers. >> are you seeing the same thing? >> yes. >> miami is the center of latin america, that's the way i always looked at it. >> not anymore. >> you're pretty darn
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optimistic, both of you. that's it for this evening's show. thanks for watching. i'm larry kudlow and we'll be back on monday to pursue free market prosperity.
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The Kudlow Report
CNBC November 9, 2012 7:00pm-8:00pm EST

News/Business. Larry Kudlow. Larry Kudlow provides his unique perspective on business, politics and investing. New.

TOPIC FREQUENCY Benghazi 11, Miami 7, New York 7, Washington 6, John Boehner 5, David Petraeus 5, Matt Miller 4, Schwab 4, Boehner 4, Jared 4, Larry Kudlow 4, Cia 4, Sandy 3, Geico 3, Mr. Petraeus 3, Bob 3, South Florida 3, South America 3, Libya 3, Chuck Schumer 2
Network CNBC
Duration 01:00:00
Scanned in San Francisco, CA, USA
Source Comcast Cable
Tuner Virtual Ch. 58 (CNBC)
Video Codec mpeg2video
Audio Cocec ac3
Pixel width 528
Pixel height 480
Sponsor Internet Archive
Audio/Visual sound, color

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on 11/10/2012